#ARK' Invest Funds Are Looking For #Excuses - Blame the #Efficient #Markets

 

Editor's Comments

Professional Money Managers should know by now that the markets don't always perform or go as planned - if they did then we would not have to pay you guys the BIG bucks and the shoeshine boys would have new jobs. 

 

 

Still, it is fun to watch the top high profile managers scramble and create dramatic stories of witchcraft, voodoo, dark forces or other externalities to explain their bad ideas and poor performance.  For investors this form of Hollywood hyperbole and rhetoric is usually a good sign that it is time to take your losses and head for the higher ground - where performance is consistent and standard deviations are closer to the mean.

 

In the end, it still remains a judgement call depending on your risk appetite and how much you can burn in the fireplace.

 

T A McNeil 

Founder CEO 

First Financial Insights

 

Stock market faces the most ‘massive misallocation’ of ‘capital in the history of mankind,’ says ARK’s Cathie Wood

By 

Mark DeCambre

Catherine Wood, chief executive officer and chief investment officer, ARK Invest

 PATRICK T. FALLON/AFP/GETTY IMAGES

“The companies that are going to be hurt most by inflation and interest rates—if they are going to be a problem—are those that are in the mature growth category,” she said.

Cathie Wood, the star fund manager and chief executive of ARK Invest, took to CNBC to defend the woeful performance of the manager’s suite of disruptive innovation funds.

Wood told the business network in a Thursday interview that the gravitation of money managers toward benchmarks, rather than taking risk on what she views as potentially game-changing technology in gene editing, electric vehicles and artificial intelligence, among others, was creating a “massive misallocation of capital” in markets that could be the biggest in “the history of mankind.”

“Benchmarks are where they are because of past successes…If we are right, those are the companies that will be disrupted,” she said on CNBC.  

She said “absolutely,” when asked if some of the companies her funds have invested in, which enjoyed nearly parabolic run-ups during the height of the pandemic-fueled worries in 2020, would return to their pandemic heights.

So far in 2022, each of the flagship ARK Innovation’s ARKK, -4.96% 40 holdings had fallen more than 10%. The fund itself has slumped 26% year to date, and lost more than half its value over the past 12 months, FactSet data show.

By comparison, the Dow Jones Industrial Average DJIA, -0.68% was down 5% in the year to date, the S&P 500 index SPX, -0.72% was trading 7.4% over the same period, the Nasdaq Composite Index COMP, -1.23% has declined by 11.5% and the large-capitalization Nasdaq-100 index NDX, -1.14% was off 12.4%, as of Thursday afternoon.

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